Long Term Care insurance helps pay for long-term care services typically not covered by regular health insurance, Medicare or Medicare Supplemental Insurance.
When considering the purchase of long term care insurance for yourself or a family member, there are several things to consider. First, long-term care insurance is not available to everyone. Certain conditions, like Alzheimer's Disease can make you ineligible for coverage. Other diagnoses may limit coverage. Second, not everybody needs long term care coverage. Since coverage can be expensive, it is best to identify the benefits that are provided, the protection offered and the alternatives available (i.e. Medicaid coverage).
Once you decide that a policy is needed, be sure to clearly understand the benefits and limits of the policies considered.
Triggers: These are the conditions necessary so that coverage can begin. Some policies require a 3-day hospital stay, similar to Medicare. Other policies may require that a patient is unable to perform 2 of 5 activities of daily living (bathing, dressing, toileting, ambulation, feeding). Others may require that 2 physicians deem care “medically necessary” or have a waiting period before coverage can begin. It is important that you understand how and when coverage can begin, so that it can be used when needed.
Limits: Policies generally are limited in three different ways; time limits, money limits or a combination of both. Some policies cover services for a specific length of time (two years, five years etc.). Other policies cover up to a specific dollar amount ($100,000, 1 million, etc.) for the life of the policy. Some even have a combination limit, ( 4 years or up to 1 million dollars). Again, understanding the limits of the policy will help determine the type of care and amount of care that might be used.
Coverage: The type of care provided under a policy by also be limited. Some policies cover “whatever is deemed necessary” including in-home care, assisted living care, nursing facility care or combinations of care depending on need. Other policies offer limited coverage for one or more classes of service, (nursing home only, or in-home only). It is important to make sure your policy covers the type of care that you would want.
The more flexible the policy, the more useful it can be when needed. It is important to balance service with cost, to make decisions early, to be aware of what you are buying, and buy from a reputable insurance representative.